You could reduce the room size to 30x20 and use 16x16 tiles from AE (IF they are 16x16... maybe 14x14? Unsure). Puzzles can still be made in this area. As for controls, touching different parts of the screen could act as movement/waiting (emulate a keypad on the screen), tilting the iPhone could work as sword rotation, maybe undo (tilt to self). I am not sure how practical they are, though.
But such project is unlikely to be finished - look at the DROD Flash. Or is there someone still working on it?
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Progress in game:
DROD:AE - Complete
DROD:JtRH - Mastered
DROD:TCB - Mastered
DROD:SS - Perfection - Perfection 4
DROD:SS - Smitemastery 101 - Mastered
DROD:SS - Master Locks - Mastered
DROD:SS - DDDD - Conquered (67%)
DROD:SS - Suit Pursuit - Mastered
DRPG:TT - Conquered (62%)